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From kb5233 in response to Thursday's 'Stock Market Roundup' which highlighted Ampio Pharmaceuticals (AMPE), a company that was the target of a harsh review by TheStreet.com's biotech blog that morning:
What is your opinion on the "biotech blogger's" comments on CVM? He has written some previous articles that outline a number of, if not falsehoods, what appears to be some questionable data. Thanks.
VFC's Take: The biotech blogger's opinions on Cel-Sci Corp (CVM) are nothing new, as even he acknowledged that he has discussed the company on numerous occasions in the past. In fact, I believe at one point he was using the company's press releases to teach his kids math, which was either a bad joke or a testament to the quality of public education in that guy's zip code.
The fact is, however, before anyone invests in the biotech/small pharma sector, they do so, or at least should do so, understanding the inherent risk involved - most drugs fail to make it through the clinical process and past the FDA. On the flip side of that fact, since most drugs fail, then you do pretty good if you bet against everything, and over the years that seems to be the strategy employed by the biotech blog at TheStreet.com; that and to create controversy in order to gain clicks for the advertisers. After all, TheStreet is a publicly traded company, so the ultimate goal is to attract page views and advertiser money, not necessarily to serve the interests of the readers.
Regarding Cel-Sci, Multikine has made it to Phase III. That is not a testament to the treatment's ultimate success, but it is a testament that there is legitimacy behind its progress thus far. Fantasy and fiction does not make it to Phase III.
There is no saying at this point whether Multikine will succeed past Phase III and make it through the FDA - the biotech blogger was just as adamant that Dendreon (DNDN) would fail as well - but there's little doubt that if the trial is a success, then the CVM share price is going to be trading at much higher prices that it is now.
That said, since we all know that nothing is a sure thing in this sector, it's a pretty wise move to take advantage of the speculative spikes and dips to ensure profits are banked before the big news comes out. Funn enough, over the years CVM has given shareholders more than a few ample times to bank some profits. In the biotech blogger's rant on Thursday, he makes it out to seem like a bad thing that investors have been able to make out pretty good by playing those trades.
Most of the runs that materialize with CVM have been good for near-doubles, or more.
In the world of investing and trading, those are some pretty good numbers - and let's not be mistaken, while it's a golden opportunity to be able to take part in the advancement of medicine by becoming an investor of a new technology, treatment or drug, ensuring the investment is protected takes precedence through the trial stages, and that often means playing some trading shares into the spikes and the dips.
Again, with CVM, there's been more than ample opportunities to do that.
It's rare when the biotech blogger will bring a new idea to the table, or look for under-the-radar companies to bring to the eyes of investors so that they may conduct some DD and decide if its worth the investment risk - because that, for the most part, does not attract page clicks on a massive scale.
Disagreement and negativity does, and that's the name of his game. There's nothing necessarily wrong with that, everyone's got to have an angle and everyone's got to earn a pay check, but if the lack of reaction from either AMPE's or CVM's share price is an indicator, even readers of TheStreet.com are realizing that it's becoming a tired game and paying no notice.
To be fair, AMPE did drop 5% on Thursday, but volume was weak and it still traded within its recent price range.
CVM dropped a penny.
If Multikine makes it through this trial, then there will most likely be huge gains to be had. If it fails, the share price is ultimately done - that's the name of the game in the sector. In the meantime, as always, investors should at least have a few trading shares on hand, in my opinion, to play the spikes and dips.
That strategy has supported many a night on the Goose with the Cel-Sci action, for that have employed it.
Take what you read anywhere with a grain of salt - at the end of the day it's up to each individual investor to conduct his or her own DD and invest accordingly. Blogs and opinions are only tools to be used as a starting point. It could be said by the biotech blogger that he has saved investors a lot of money because he has talked them out of investing in many companies - a line also employed by Jim Cramer. It's also a fact, however, that investors have not had the chance to make money either by reading the biotech blog, becuase it's not a blog that searches for ideas or potential success stories. It's easy to say "don't buy anything."
Remember back when Jim Cramer told everyone to sell everything they had and stay out of the market for five years back during the crash of late 2008, early 2009?
People were terrified to buy anything and missed out on huge buying opportunities.
Point is, everyone will have an opinion about the end game, but it's only an opinion until the story plays out. And you know what they say about opinions, everyone's got one of those, too.
In the meantime, this sector gives us plenty of speculative spikes and dips to play with - and that's money. If Multikine does turn out to be a success and you're sitting on a few shares when that news hits, then you're talking Dendreon-like price increases. Both the biotech blogger and his boss Cramer told everyone to stay away from that one, too.
It's not about breaking the bank on one speculative play in this sector, but there's nothing wrong with taking a dabble.
No matter how negative an idea some try to make that out to be.
Disclosure: Long CVM, AMPE.
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